BRICS Summit in New Delhi Highlights Geopolitical Tensions and Economic Cooperation Amid U.S. Pressure

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When Chinese President Xi Jinping, Russian President Vladimir Putin and Indian Prime Minister Narendra Modi were together in China last year, images of the three leaders smiling, holding hands and chatting animatedly went viral.

This weekend, they meet again in New Delhi against an increasingly complicated geopolitical backdrop.

India is hosting leaders of BRICS, a grouping of major emerging economies seeking greater influence in a global system long dominated by the U.S. and other Western powers. Xi, Putin and Iranian President Masoud Pezeshkian are among those expected to attend alongside Modi.

The U.S. and Israel are at war with Iran, Washington continues to push Moscow toward a deal to end the war in Ukraine, and U.S. President Donald Trump's trade policies have disrupted relationships with allies and rivals alike.

Against that backdrop, the summit will put the spotlight on whether those pressures are giving some BRICS members more reason to cooperate on trade, energy and payments, even as deep divisions limit how far that cooperation can go.

Trump's policies are not the reason these countries are talking. India and Russia have maintained close relations for decades, while the India-China thaw began before the latest U.S. trade tensions. But tariffs, sanctions and other economic pressure from Washington are adding another factor to their calculations.

A complicated relationship

Xi's visit will be his first to India since 2019, marking another step in a cautious thaw after deadly clashes along the countries' disputed Himalayan border in 2020.

Modi and Xi have sought to stabilize ties, with flights, visas and high-level contacts being restored. But tensions remain over their border, India's large trade deficit with Beijing and their strategic rivalry across Asia.

The U.S. has also spent years deepening its relationship with India, which is a member of the Quad alongside the United States, Japan and Australia.

India has long pursued strategic autonomy, maintaining ties with Russia and Iran and improving relations with China but still deepening cooperation with Washington.

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Chietigj Bajpaee, senior research fellow for South Asia at Chatham House, wrote that recent strains with the Trump administration have caused New Delhi to reinvest in other relationships.

"The meeting between Modi and Xi is likely to further advance the ongoing reset in bilateral relations and build confidence. A meeting in August between the Chinese foreign minister and Indian national security advisor made notable progress on their longstanding border dispute," Bajpaee said in an article earlier this week.

Meanwhile, Russia has different motivations. Western sanctions over Ukraine have made partners outside Europe and the U.S. increasingly important. China has become a critical economic partner, while India is a major buyer of Russian oil.

For Putin, deeper economic relationships with China and India provide an important buffer against sanctions, while the summit offers an opportunity to demonstrate that Russia retains relationships with some of the world's largest economies.

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Trump's pressure campaign

Trump has made tariffs central to his economic and foreign policy agenda, while Washington continues to use sanctions and other economic measures against Russia and Iran.

For BRICS members, the use of those tools has put greater focus on alternative channels for trade and payments.

The group has discussed increasing trade in local currencies and developing alternative cross-border payment mechanisms. India has sought to steer BRICS away from a broader de-dollarization push, emphasizing instead the use of national currencies and digital payments to reduce the cost of cross-border trade, according to Bajpaee.

Russia has increasingly conducted trade outside the dollar system, although the Kremlin said this week that Moscow was not seeking outright "de-dollarisation."

Trump has previously described BRICS as an "attack on the dollar" and threatened tariffs against members if they sought to undermine the U.S. currency.

But BRICS members differ over how far they want to reduce their dependence on the dollar, which continues to dominate global reserves and international transactions.

A 'dysfunctional family'

BRICS has expanded beyond Brazil, Russia, India, China and South Africa to include countries such as Iran, Egypt, Ethiopia, the United Arab Emirates and Indonesia, increasing its economic and geopolitical weight but making consensus more difficult.

Sarang Shidore, director of the Global South program at the Quincy Institute, called BRICS a "dysfunctional family."

Its differences have emerged "most obviously and most clearly" over security issues, he told CNBC's "Squawk Box Asia" on Friday, pointing to how Iran and the UAE are both members despite being on opposing sides of the war in the Middle East.

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Shidore said BRICS was a "pragmatic club for limited purposes." Its members, he said, are primarily focused on development, trade and reforming global institutions, rather than building an ideological bloc against the United States.

Bajpaee similarly argued that India wants BRICS to promote a non-Western worldview without becoming explicitly anti-Western, even as some members push the group in a more geopolitical direction.

India's desire for deeper ties with the U.S. illustrates the overlapping relationships at play, which complicate the idea of BRICS as an emerging anti-U.S. alliance.

Other BRICS members, including the UAE, also maintain important ties with Washington while diversifying their economic relationships. The UAE recently pledged to invest $46 billion in Germany across a range of sectors.

Xi is due to travel to the United States later this month.

Bajpaee said members still see value in BRICS despite differing visions for its role. He noted that a Modi-Xi meeting at the 2024 summit helped set the India-China reset in motion.

As Xi, Putin and Modi meet again in New Delhi, the question is whether U.S. tariffs, sanctions and other economic pressure will make this summit a catalyst for another shift.